Is Baidu Stock a Buy?
2019 wasn't a great year for Baidu (NASDAQ: BIDU). The company encountered such headwinds as the slowdown of the Chinese economy, the country's trade war with the U.S., and competition from several companies that is eating away at its core business (more on that below). Baidu's shares lost 20% of their value last year, seriously underperforming the S&P 500's 29% return over the same period.
However, Baidu remains one of the most important tech players in the Chinese market, and the company will look to recover in 2020 and beyond. Is Baidu stock a buy today, or should investors keep their distance?
Baidu operates the largest search engine in China, and the company generates the bulk of its revenue from advertising. But there are other platforms challenging this core business. They include Tencent's WeChat, which is an app that offers several functions, such as messaging, payment services, and yes, a search function. WeChat's search engine is unlikely to topple Baidu as the top dog in this category in China any time soon, but the app's ecosystem of users -- WeChat boasts more than a billion monthly active users (MAUs) -- is an attractive target for advertisers.
Source Fool.com
